TMTPOST --   Nvidia   Corporation   CEO   Jensen Huang on Wednesday confirmed   a report   about his company ’ s involvement in   fundraising of   Elon   Musk ’ s artificial   intelligence ( AI )   startup xAI.

Credit：Alibaba Cloud

Huang mentioned Nvidia ’ s investment in   xAI when he was asked about   Nvidia ’ s reported helping finance   xAI ’ s   fundraising, and whether such deals   amounted to   circular   financing,   under which Nvidia lends money to   AI   startups   and in return,   the borrowers buy its chips.  

"I'm super excited about the financing opportunity they're doing," Huang said in a CNBC interview on   Wednesday. "The only regret I have about xAI — we're an investor already — is that I didn't give him more money."  

Moreover,   Huang   expressed his regret for not   making bigger   investment   in the Musk ’ s   AI venture.   He praised Musk's track record, saying the Tesla and SpaceX founder has a knack for building transformative companies. "Almost everything Elon's part of, you really want to be part of as well," he said.

Huang   hailed xAI as part of a new generation of AI firms,   along with OpenAI and ANthropic,   that are reshaping computing as   their   models become more powerful and commercial   viable.   "For the last several years, they were generating tokens at a loss," he said. "But in the last several months, it's become clear the technology is now reasoning, doing research, using tools — it's actually useful. The tokens are profitable now."

xAI is lifting   its initially planned financing to $20   billion,   tapping backers including Nvidia, Bloomberg earlier Wednesday cited people with knowledge of the matter.   The financing   deal is   said to in   the form   of a special   purpose vehicle ( SPV )   involving equity and debt, and Nvidia is investing up to $2 billion in the equity portion   of the deal.

The equity portion   of xAI ’ s financing could   be amount to $7.5 billion,   and the   debt part to be $12.5   billion, according to the report. It   called   the deal   structure unique   as it would be "backed by   GPUs as opposed to the company."  

The financing will   reportedly   purchase   Nvidia   chips and   then rent them to xAI   for   use in   its Colossus 2 project, its   largest datacenter site,   which is located in Memphis.   xAI   and Nvidia   didn ’ t comment   on the report.   If it   is accurate, the new   funding size   that   the   startup   operating the Grok model   has almost doubled   from   last   month.  

It was reported on September 20 that xAI has   raised   more than $10 billion   at a   $200 billion   valuation, and the funding round   includes investment from Valor Capital, the Qatar Investment Authority and Prince Al Waleed bin Talal via his Kingdom Holding Co.

Nvidia has shown a general willingness recently to make deals with industry players. The company   on   September 22   said it   reached   a letter of intent on a strategic partnership to deploy at least 10 gigawatts   ( GW )   of Nvidia   systems for OpenAI ’ s next-generation AI infrastructure to train and run its next generation of models on the path to deploying superintelligence.

To   support   the planned deployment   including data center and power capacity, Nvidia   made   its   largest-ever spend   commitment. It intends to invest up to $100 billion in OpenAI as the new   Nvidia   systems are deployed. The first phase is targeted to come online in the second half of 2026 using the Nvidia   Vera Rubin platform.

Huang on Wednesday said   Nvidia ’ s commitment   under the partnership   with OpenAI is "very different"   from   the latter ’ s deal with AMD in that   it allows Nvidia   to directly sell to the ChatGPT developer. Just   like the investment in   xAI, Huang   felt regretful   that Nvidia   didn ’ t   go   bigger. He said his "only regret is that we didn ’ t invest more"   after Nvidia   invested in   OpenAI.   

Huang   in the   interview   showed upbeat   on the AI demand. "This year, particularly the last six months, demand of computing has gone up substantially,"   he said. He   explained that we are   seeing   both computing power and   the demand experiencing exponential growth   at the same time. As to Nvidia ’ s most advanced graphic processing unit   ( GPU ) ,   he stressed demand for Blackwell   is "really,   really   high"   as we ’ re at the beginning of a new industrial revolution.